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Condor Gold, Forte Energy, Mariana Resources, Ncondezi Coal and others feature in Fox-Davies Newsflash


Daily Mining Monitor

African Minerals (LON:AMI) has confirmed new financing arrangements with Standard Bank of South Africa.

In this news:

The establishment of $250m secured loan facility, structured to be capable of being increased to fund  subsequent expansion to 35mtpa, subject to further approvals

The establishment of corporate level revolving credit facility of $100m for general corporate purposes, replacing $100m amortising standby facility of which $80m is currently outstanding, providing $20m of additional liquidity.

FD Comment: 

Both these facilities were originally highlighted in the operational and funding update on 17th December and it is a positive development that these have now been approved. This should provide sufficient additional capital to ramp up from the current 20mtpa (to be reached next quarter) to the 35mtpa with a corresponding expansion in the port facilities by 2016.

Ariana Resources (LON:AAU) has given an update on the permitting of the Red Rabbit Gold Project, Turkey.

In this news:

An Environmental Project Summary Document has been submitted to the Ministry of Environment and Urban Planning ("MEUP") for the Kiziltepe Sector of the Red Rabbit Gold Project

Formal process for the permitting of the mine has been initiated with Environmental Impact Assessment ("EIA") positive certification expected no later than the beginning of Q4 2013

Public consultation meeting for the local communities to be affected by the mine development to be held in March 2013

Acquisition of a further three parcels of freehold land totalling 35,460 m2 in the vicinity of the planned Arzu South open-pit - increases total land acquired at Arzu South to 234,432 m2

Geotechnical drilling has been completed at the Tailings Storage Facility ("TSF") site ahead of schedule.  Results to date have been positive and support the potential for the designated area to host the tailings dam

Discussions with potential lenders to the project to be advanced.

FD Comment: 

This is a positive update from Ariana, which now expects the permitting being concluded in 2H’13 with construction planned before the year end. In addition the acquisition of three further parcels of land close to the planned Arzu South open pit, have the potential to further increase the resource.

Aura Energy (ASX:AEE) has requested its shares on the ASX be placed in a trading halt pending the release of an announcement by the Company.

Botswana Diamonds (LON:BOD) has entered into an agreement over 13 prospecting licenses in Botswana.

In this news:

Agreement with private South African company which holds 85% interest in 13 prospecting licences in SW Orapa, Botswana

Agreement for a three-month exclusivity period to review the available data on the licences

If positive, Botswana Diamonds will negotiate an equity interest in the licences.

FD Comment: 

The region does contain Gem Diamonds Ghanghoo project, but at this stage there is no certainty a deal will be done or at what price.

Condor Gold (LON:CNR) has acquired new concession to increase the footprint of the La India Project in Nicaragua.

In this news:

A 86.4km2 concession covering a potential 13km strike extension to the America and Mestiza Vein Sets

Consideration of US$275,000 payable by issuing new ordinary shares in Condor Gold plc at a price of £2.00 per share

Four areas of quartz veining identified, indicating epithermal fluid movement

Historically poorly explored area due to poor access.

FD Comment: 

This is a good acquisition for Condor. The La India currently has a CIM compliant Mineral Resource of 2.3755Moz gold at 4.6g/t. Within that the America Vein Set hosts a resource of 405koz gold at 6.0g/t and the Mestiza Vein Set hosts a resource of 334koz at 7.0g/t. Both these are open to the NW and trend into the new concession and although little historical work has been done on the new concession, there is potential for further increases in the La India current resource.

Forte Energy (LON:FTE) has provided an update on ASX trading holt announced on Friday. 

In this news:

The Company is in advanced negotiations on a number of different transactions

Forte is not in a position to provide further information on the potential transactions at this time

Shares will remain suspended on the ASX until after an announcement has been released. Forte Energy shares will continue to trade on the AIM market throughout this period.

Golden Rim Resources (ASX:GMR) has announced a maiden resource and preliminary scoping study for the Netiana Lodes at Balogo, Burkina Faso.

In this news:

Inferred Resource of 850kt at 6.8 g/t gold for 185koz at a 0.5 g/t cut-off

High-grade core of the resource is predominantly oxide material and is located only 25m below the surface enabling early extraction in an open pit operation

Resource estimate is highly conservative with spatial restrictions placed on the influence of high-grade gold samples in the resource model

Preliminary Scoping Study on open pit has calculated NPV of A$45.7M and an IRR of >100% over a 2 year mine life

CAPEX for a new modular 250,000 tpa plant is estimated at A$38.8M and total Operating Cost (OPEX) is estimated at A$603/oz at a treatment rate of 30tph

Scoping Study is expected to be finalised by the end of February 2013, after which Golden Rim expects to proceed directly into a Definitive Feasibility Study

The Company’s goal is to produce its first gold from the Netiana Lodes late in the 2H’14.

Lemur resources (LON:LMR) has released a revised resource statement for its Imaloto Coal project in Madagascar.

In this news:

Resource now 147.5m Gross Tonnes in Situ

Split 52% measured, 28% Indicated and 20% Inferred

73.3M GTIS is in Main seam expected to produce a primary product with a 67% yield

Secondary product suitable as feedstock for domestic power station.

FD Comment: 

The purpose of the Western Drilling programme was to improve the resource category from 100% inferred to have some measured resource to allow completion of the mining scoping study. Now this has been achieved and the Company believes there is sufficient coal to support a mining operation for a sustained period, the mining scoping study will be completed and the results incorporated with the port and infrastructure studies into the financial valuation. Lemur expects to produce a 6,500 kcal/kg NAR export produce and a domestic product for a coal fired power station.

Mariana Resources (LON:MARL) has released details of its revised strategy and restructure plans.

In this news:

Delist from TSX due to low trading volumes, Canadian ownership and compliance costs and administration

Shift exploration focus away from Santa Cruz Province in southern Argentina to the Condor del Oro property in northern Peru due to better prospectivity, negative investor sentiment to Argentina and difficult market for junior exploration companies

Restructure board to reflect these changes with John Horsburgh becoming non executive chairman, Glen  Parsons become CEO from CFO and Ray Angus will step down as COO and become domiciled manager in Peru.

Ncondezi Coal (LON:NCCL) has announced the appointments of Peter O’Connor and Christiaan Schutte as Non - Executive Directors and the resignation of Colin Harris from the Board of Ncondezi.

In this news:

Peter O’Connor has spent over 20 years at Eskom most recently as Senior General Manager of the Capital Expansion Division, responsible for the EPCM of all the Company’s generation and transmission expansion projects

Christiaan Schutte also has over 20 years at Eskom most recently he was Senior General Manager of the Group Technology Division and responsible for all the engineering functions at Eskom, including design accountability for new power stations, transmission lines and distribution development.

FD Comment: 

Ncondezi is currently focussing on building a 300MW power station to commence construction next year and generate power by 2017 at a capital cost of US$500-600m. This is the first phase of an eventual planned 1700MW power project. As well as infrastructure, coal quality is a real issue. The Ncondezi Mine DFS indicated a 45.9% yield producing a 51% domestic (17CV) and 28.9% Export (25CV) product. As well as substantial discard, Ncondezi needed to do something with the lower quality product and a local IPP was the obvious answer. With the lack of progress on infrastructure the IPP has become the preferred initial route, however the CAPEX costs are significant and every other coal producer in the region will need a “dustbin” for its non-export product with Vale announcing a 1,800MW power plant in September, giving concern that in an undeveloped domestic market and restricted export market there is significant planned overcapacity.

Petra Diamonds (LON:PDL) has announced that Dr Omar Kamal is stepping down as a Non-Executive Director of the Company, with immediate effect. 

In this news:

Dr Kamal was appointed by Al Rajhi, Petra's largest shareholder with 13.1%

Al Rajhi has no immediate plans to appoint a new representative.

Sable Mining Africa (LON:SBLM): £107, 11.5p) has released a Maiden JORC Resource at Nimba Iron Ore Project.

In this news:

The resource at Plateau 2 is 4.2Mt at 61.7% Fe Indicated Resource and 75.1Mt at 58.5%Fe Inferred at a 40% Fe cut-off

Plateau 3 reports 42.2Mt for 56.4%Fe Inferred resource

Combined Resource is 121.5Mt at 57.8% Fe at a 40% Fe cut-off

Simple crush and screen processing should produce a 60-63% Fe Direct Shipping Ore product ('DSO')

Overall product ration expected to be 24% lump and 76% fines

A concept study is in progress and the Company plans to complete a pre-feasibility study and submit a mining license application and EIA by 2H’13.

Stellar Diamonds (LON:STEL) has raised £1.1m before expenses from directors, institutional and other investors at 2.65p/sh.

In this news:

Represent ~12.47% of the enlarged share capital

Funds to be used to advance the Droujba and Tongo projects and commission independent economic scoping studies costing £0.6m

Directors are participating in the Placing and Subscription at the Placing Price through conversion of accrued fees and expenses of £91,686.

FD Comment: 

Raising money for a small diamond Company is always a challenge, so this is a positive step for the Company, marred slightly that the headline number includes the conversion of director fees and expenses. However, this should allow the Company to produce scoping studies on Droujba and Tongo which will provide investors numbers around which to make a more informed decision on the Company’s future.


Quick facts: Archer Daniels Midland

Price: 40.43 USD

Market: NYSE
Market Cap: $22.56 billion

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